Judge: RealNetworks caused its own legal problems

A judge has rejected RealNetworks' claim that the movie studios were colluding …

RealNetworks has suffered yet another a legal blow in its battle to bring its DVD ripping software to market, and according to the judge, it's the company's own fault.

On Friday, Judge Marilyn Patel dismissed Real's antitrust claims against the movie industry, saying that the the studios had every right to band together to prevent the sale of RealDVD. Real didn't suffer any damages at the hands of the studios, either—according to Patel, Real brought the situation on itself by attempting to sell illegal software in the first place.

"Help, help, I'm being repressed!"

The legal fallout from RealDVD has been showering down since September 2008—before the program was even released to the public. Real claimed that it was able to rip DVDs while still preserving the discs' copy protection mechanisms. At that time, the company was confident that RealDVD operated well within the DMCA because the software didn't break CSS encryption—it merely copied data straight to a hard drive, keeping the encryption intact.

Real even added a new layer of DRM to each file to lock it to the user and PC that created the file, which the company thought would keep it on the movie studios' good side.

Real then tried a new tactic: it filed counterclaims against the DVD Copy Control Association (DVD CCA) and the movie studios, accusing them of illegally ganging up to bully Real. Real pointed out that the DVD CCA licensed numerous specifications to the company, but then turned around to allege that Real had broken "hidden and secret contractual terms" in its licensing agreement... all this as part of an alleged private pact with the movie studios to keep Real out of the market.

"Without this illegal cartel, Real and others would be able to compete to provide consumers with products to enable them to gain more value from their DVDs, without having to pay again to make a fair-use copy of the DVDs they had already purchased," Real VP of Corporate Communications Bill Hankes told Ars at the time.

The studios moved to have Real's claims dismissed, and they have now succeeded. In her decision, Judge Patel wrote that the DVD CCA and the movie studios were exempt from antitrust liability thanks to the Noerr-Pennington doctrine (the companies were in the right to band together in an attempt to urge some sort of legal outcome).

Further, Patel said that Real failed to demonstrate any sort of injury due to the alleged anticompetitive behavior—in fact, she said that the only injury Real has suffered was a result of its own delays combined with the legal injunctions imposed against the company, which were all Real's own fault because it tried to roll out illegal software.

"In the circumstances of this case, there is no allegation Real could make that would give it antitrust standing," wrote Patel, who dismissed Real's counterclaims without leave to amend.

At this point, Real is pretty much out of options. The company is still barred from selling RealDVD, and it has no case against the movie studios for collusion. The studios had argued that Real wouldn't have found itself in this situation at all if it had not decided to create such a questionable product, and the judge in the case agreed. Real will have to find some other grand plan to enable consumers to enjoy their content—a plan that doesn't involve crossing the DMCA.